Thursday, April 16, 2020

Investing - What I Would Tell My 20 Year Old Self

If I only knew then, what I know now. ~ old adage

Here are some investing tips I wish I had known when I was younger:
  • Time in the market is more important than market timing.   Invest early, invest consistently, and invest regularly throughout one's life.  If there is interest in "market timing," increase the amount of regular contributions when the market is going down.
  • For most people, investing in the total market index will give better results than investing in individual stocks.   The total market eventually goes up over time and never goes to zero.   Individual stocks don't always go up and can go to zero.  However, investing in indvidual stocks is more exciting, and concentration on the "right" individual stocks can result in signficant wealth.  An allocation of 10-20% to individual stocks will usually provide sufficient excitement and bragging rights.
  • Investing in individual stocks is hard work.  Gambling in individual stocks takes little work.  Hard work does not guarantee making money nor not losing money.  Gambling sometimes leads to big gains, but more often leads to losses.   Most buyers of  individual stocks end up somewhere in between investing and gambling.   
  • The most important decisions to make when buying an individual stock:  Which stock.  What price to buy.  What price to sell.  Develop your own system and adjust as needed.  People that claim to know the answer don't really know.  Otherwise, they would be extremely wealthy instead of managing your money or selling you a newsletter.
Good luck to all during the COVID-19 market correction/bear market.

For more on Crossing Generations, check back  Thursdays  for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2020   Achievement Catalyst, LLC

No comments: